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Tax Structure, Size of Government, and the Extension of the Voting Franchise in Western Europe, 1860-1938

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Author Info
Aidt, T.S.
Jense , P.S.

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Abstract

We study the consequences of the extension of the voting franchise for the size of (central) government and for the tax structure in 10 Western European countries, 1860-1938. We show, .rstly, that the gradual relaxation of income and wealth restrictions on the right to vote contributed to growth in government spending and taxation. Secondly, we show that the impact of the franchise extension on the tax structure is conditional on tax collection costs. We find that the share of direct taxes (including the personal income tax) is positively affected by the franchise extension, but only if relative collection costs are below a given threshold. We use literacy as a proxy for the cost of levying a broad-based income tax.

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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0715.

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Length: 29
Date of creation: Apr 2007
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Handle: RePEc:cam:camdae:0715

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Related research
Keywords: Voting franchise; democracy; public finance; taxation.;

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Find related papers by JEL classification:
D7 - Microeconomics - - Analysis of Collective Decision-Making
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  2. Gian Maria Milesi-Ferretti & Roberto Perotti & Massimo Rostagno, 2002. "Electoral Systems And Public Spending," The Quarterly Journal of Economics, MIT Press, vol. 117(2), pages 609-657, May. [Downloadable!] (restricted)
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  3. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 277-97, April. [Downloadable!] (restricted)
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  15. Boadway, Robin & Marchand, Maurice, 1995. "The Use of Public Expenditures for Redistributive Purposes," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 45-59, January. [Downloadable!] (restricted)
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  25. Borge, Lars-Erik & Rattso, J.Jorn, 2004. "Income distribution and tax structure: Empirical test of the Meltzer-Richard hypothesis," European Economic Review, Elsevier, vol. 48(4), pages 805-826, August. [Downloadable!] (restricted)
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  27. Husted, Thomas A & Kenny, Lawrence W, 1997. "The Effect of the Expansion of the Voting Franchise on the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 54-82, February.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Henrik Jacobsen Kleven & Claus Thustrup Kreiner & Emmanuel Saez, 2009. "Why Can Modern Governments Tax So Much? An Agency Model of Firms as Fiscal Intermediaries," NBER Working Papers 15218, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Aidt, T. & Jensen, P.S., 2007. "The Taxman Tools Up: An Event History Study of the Introduction of the Personal Income Tax in Western Europe, 1815-1941," Cambridge Working Papers in Economics 0766, Faculty of Economics, University of Cambridge. [Downloadable!]
  3. James B. Davies & Stanley L. Winer, 2008. "Closing the 49th Parallel: An Unexplored Episode in Canadian Economic and Political History," University of Western Ontario, RBC Financial Group Economic Policy Research Institute Working Papers 20083, University of Western Ontario, RBC Financial Group Economic Policy Research Institute. [Downloadable!]
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